April 2013

With preparations for the G8 Summit in June in full swing, British Prime Minister David Cameron has made clear that transparency will be a key theme and within that a focus on transparency not just in the extractives sector but around land more broadly. This is in large part a response to concerns around the proliferation of large scale land acquisitions – the “land grab” phenomenon. Certainly that topic dominated discussion at the World Bank’s annual Land and Poverty conference this month.

Coal has been a mainstay of Indian energy. It accounts for 63% of India’s energy consumption, and demand is set to grow dramatically over the coming decades. Coal use for electricity generation is projected to grow 2% every year, almost doubling its share of India’s generating capacity by 2030. According to the International Energy Agency, India is likely to become the second-largest consumer of coal, surpassing the United States in the next five years.

Because coal is both cheap and abundant domestically, it may seem like the perfect solution to India’s energy and electricity woes. However, using coal comes with severe health, environmental, and economic effects. As quality of life improves for most Indians on one hand from economic progress, many could be subject to the vagaries of this dirty pollutant. Also, as the world moves closer to a consensus on climate change, using coal at this growing rate may become untenable.

Two recent studies shed light on the huge environmental damage that is done by coal-fired power plants in India. Professor Maureen Cropper and her co-authors at the University of Maryland estimated premature cardiopulmonary deaths associated with air emissions from 89 power plants from all over India. Last week, Professor Cropper presented their analysis in a World Bank seminar. Their study attributes on average 650 deaths per plant per year to directly emitted sulfur dioxide, nitrogen oxide and particulate emissions from coal plants.

Another recent study published by Greenpeace and authored by Sarath Guttikunda and Puja Jawahar presents more dramatic results than the Cropper study. It suggests that in 2011-2012, emissions from Indian coal plants resulted in 80,000 to 115,000 premature deaths and more than 20 million asthma cases from exposure to particulate pollution with an associated cost of $3.3 billion to $4.6 billion.

Almost all development agencies promote some form of citizen engagement and accountability, often framed as 'voice', 'demand-side governance', 'demand for good governance' or 'social accountability'. The current World Bank president, Jim Yong Kim, recently put it that, "citizen voice can be pivotal in providing the demand-side pressure on government, service providers, and organizations such as the World Bank that is needed to encourage full and swift response to citizen needs". There has, in turn, been a mushrooming of useful operational guidance on different "tools" for social accountability - i.e. steps, inputs and methodologies - that guide discrete interventions, ranging from citizen score cards to participatory expenditure tracking.

One might, however, be forgiven for thinking that some of the debates on citizen engagement need an injection of realism; especially as contextual factors can make or break a "tool's" implementation. A review of experience to date would be one good place to start.

Financial Markets…Global shares extended their gains today, with the benchmark MSCI world equity index rising 0.2% after gaining 2.3% last week, as investors speculated that continued monetary stimulus from the US and Euro zone central banks will bolster global economic recovery. News of Italy’s new government and higher-than-expected US consumer spending in March also weighed positively on world stock markets.

“I know that there are some technocratic advisers who tell us what the perfect model to respond to a situation is, but when we ask how we implement it, they say: ‘That is not my business.’ We need to have a policy that is right. At the same time we need to have…acceptance, political and social.”

The question of nepotism is in the minds of many people in the Arab world. Some are hopeful that change can be brought by the Arab Spring, but others are doubtful. In a series of blogs, I plan to look into some of the ways nepotism, favoritism and other ills have become ingrained in Arab society.

World Bank Group President Jim Yong Kim recently announced ambitious goals to end poverty and boost shared prosperity, with a target to reduce the percentage of absolute poor – those living on or less than $1.25 a day (in 2005 PPP) – to 3 percent by 2030. The Bank, he said, will also focus on expanding opportunities for those living at the bottom 40 percent of the income or consumption distribution in each country.

More than 1.3 billion women are excluded from the formal financial system. These women – the overwhelming majority of whom reside in developing countries – lack the basic financial tools critical to asset ownership and economic empowerment. Even something as simple as a deposit account provides a safe place to save and creates a reliable payment connection with family members, an employer, or the government. A formal account can also open up channels to formal credit critical to investing in education or in a business. Yet women are 15 percent less likely than men to be financially included. Why?

In a new study and summary companion note we document and analyze gender differences in the use of financial service using new data from the Global Financial Inclusion (Global Findex) Database. Our analysis is based on almost 100,000 interviews with adults in 98 developing economies in 2011. We also combine the Global Findex data with cross-country data on legal discrimination against women from the World Bank’s Women and Law Database and on cultural norms from the OECD’s Gender, Institutions, and Development database to examine their relationship with financial inclusion. Because the later country-level variables show no variation across high income economies, our econometric analysis focuses on a sample of up to 98 developing countries.

Shifting from opt-in to opt-out defaults is one of the clearest success stories for policy to emerge from behavioral economics, as evidenced by the large increases in organ donor rates and contributions to retirement savings plans obtained when opt-out defaults are used instead of opt-in.
However, there are several limits of opt-out policies: